The next corporate revolution will be power to the peons

SAN FRANCISCO -- Microsoft, Hewlett-Packard, Dell and Intel have something in common: They all came late to the mobile revolution.

Why? Because they're companies where management is top-down and responsibility for innovation and change is concentrated among executives with strict bureaucratic control over workers.

That's got to change, Gary Hamel, a consultant and management educator at the London School of Business. Hamel, said at the CITE Conference and Exhibition here this week. And he was not alone in his belief that the next revolution in corporate America won't be technological, it'll be social.

Businesses are on the cusp of a leadership revolution because millennials moving into the workforce are "the most authority-phobic" generation in history, Hamel said.

"Now, we have a generation with a completely different set of expectations -- and probably the most core expectation they have is that if you're a leader, it's only because people are wiling to follow," he said. "The real problem we're up against is not technology, it's that management DNA in companies.... When you concentrate the responsibility for innovation at the top, you're holding your capacity to change hostage. It disempowers the little people."

Hamel pointed to the bring your own technology (BYOD) trend as the tip of a larger change coming, where employees can be more creative and have more decision-making power.

Not only should they be rewarded for being creative, they should be given the power to spend corporate money on research and development, he said. By doing that, companies will diversity their experimental capital.

"If you don't do that, you'll never change that innovation curve," Hamel said. "BYOD is a great start, but I think it's the beginning of something more radical. Bureaucracy has to die. There's no way around it."

While many companies already encourage employees to speak up when they see problems, they don't allow them to pick their own leaders and get rid of people who shouldn't be in leadership.

Jones, who spoke on a panel about gamification and the social enterprise, said that while companies tend to focus on how technology can pay off, business leaders should be pushing for a more innovative and collaborative workforce.

"The values of management today are different from the values of the social enterprise and different from the values of the consumerization of IT-- and they're not mixing very well," Jones said. "That's where we're having the battle."

The default in organizations today is control from the top, when it should be control from the bottom up.

Tom Petrocelli, an independent industry analyst, how to best to use technology. Internal social networks, for example, allow lower-level employees to collaborate on innovation. But 40% of knowledge workers never even use them to collaborate because the networks were rolled out without a use case.

"No one went in and said, 'This is the use case where this will help you get this task done.' There's no purpose to it," Petrocelli said. "You need to start small and look for purposeful use cases."

Noted business leadership author Gary Hamel chats with Matt Rosoff from CITEworld about his CITE 2013 keynote, which discussed how companies can get away from bureaucracy and give more power to employees to innovate.

"This is about finding a business solution. It's not about being social," Jones added.

One question corporate leaders should ask themselves, said Jones, is whether they even need management.

Hamel offered several examples of successful companies that eliminated management -- even CEOs -- and replaced the old hierarchy with employees who could set their own goals, design their own jobs, approve their own expenses and even choose their own bosses by committee.

When employees are hired at Morning Star, they must write their own mission statement describing how they'll create value for the company. Then they sign on to a letter of understanding with other colleagues that spells out for what they'll be responsible.

"This is a company with about 500 people, 22 business units, and there's not a single supervisor, manager, director, vice president - not boss at all. You negotiate this thing with your colleagues," Hamel said.

Employees can even issue their own purchase orders for new equipment.

"There's a lot of competition to take on more responsibility to grow your job and add more value," Hamel said. "So [there are] a lot of opportunities to improve your skills and take on bigger project, but no promotions."

Employees also elect compensation committees that determine how much workers are paid based on their productivity. Committees also determine when an employee should be fired.

Every employee at Morning Star has real-time information about the profitability of their business, and every employee sees the return on the investments that other employees are making. That way, if an investment doesn't make money, other employees will question it -- and the employee who requested it, Hamel said.

About half of all of Morning Star's employees have also been taught accounting and business skills, moving business expertise further down the ranks.

Another example of employee empowerment is HCL Technologies, Hamel said. The IT services and consulting company allowed every worker to choose their own managers, compensation and the ability to initiate a trouble ticket for internal services - such as IT, HR, and legal - that aren't helping them do their jobs.

"If you don't think you're getting the help you need, you don't agree with a decision, something's getting in your way, you fill out a ticket on that department or that individual," Hamel said. "They have to come close the ticket with you. Only the employee can close the ticket. If you don't close the ticket, 24 hours later it get escalated to the level of management. So it's only about three or four days away from [the CEO's] desk."

In the first month the trouble ticket program was rolled out, workers created 30,000 tickets, Hamel said.

"The moment you stop adding value, your power, your influence should start receding," he said. "Power and influence needs to be like water. It flows to the competent and away from the incompetent with very few barriers."

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